AFFORDABLE loans firm Scotcash has ceased lending, it has been revealed.

The firm is understood to have contacted customers today to inform them it will no longer offer new loans and will be "winding down" its services within the next six months.

Scotcash, which is based on Glasgow's High Street, is supported by Glasgow City Council, Glasgow Housing Association, NG Homes, Royal Bank of Scotland and others to offer alternatives to high-cost loans for those struggling to make ends meet.

It cited the negative impact of the "economic, regulatory and funding environment" as the reason for its demise.

A statement on its website reads: "Scotcash will stop lending with immediate effect and will be placed into an orderly wind-down. The wind-down of the business will last approximately six months, during which time the existing loan book will continue to be collected ... This is a very sad day for all our employees who have worked extremely hard over the years to provide an affordable alternative for those excluded from mainstream credit and for our wider stakeholders who have supported us over the years. We are very sorry to be delivering this news today.

"Scotcash was developed because of the need to provide regulated, affordable small loans to financially excluded people who pay a poverty premium to access financial services. The organisation has worked hard to deliver positive outcomes for our customers for over 16 years, but the current economic, regulatory and funding environment have impacted negatively on our ability to continue.

"We appreciate this is extremely difficult news for our employees, customers and stakeholders but, after full and careful consideration of all options available to us, we do not believe there is another viable route forward."

The team behind the lender will remain in the office as the business winds down in order to assist customers with any queries they may have.

They have insisted it is crucial customers continue to make payments.

It comes just months after it was revealed illegal loan shark lending had skyrocketed in Glasgow as families struggled to cope with the current cost-of-living crisis.

Data from the Glasgow City Region Intelligence Hub had predicted around 95,000 households would be forced to rely on credit to survive.

Scotcash's partners have been contacted for comment.

A Glasgow City Council spokesperson said: “Scotcash and its staff have had a positive impact on the lives of Glaswegians facing financial exclusion over more than a decade-and-a-half.

"This has obviously been a difficult decision for all concerned.”

A Wheatley Homes Glasgow spokesperson added: “Scotcash has provided a vital lifeline to thousands of families in the city who simply would not have been able to get out of debt or escape the poverty trap.

“Any of our tenants with Scotcash who are concerned about money or falling into debt should get in touch with us straight away. We have a range of support services to help.”